Saving a Buck: New disclosure rules for 401K

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OKLAHOMA CITY -- New rules from the Department of Labor require 401K plan providers to disclose detailed fee information to employers.

401K plan participants should notice the changes in their third-quarter account statements in the next few months showing the exact amount of fees deducted from their accounts.

About half of Americans will be surprised that it's not free for companies to offer a 401K.

Fees can be as high as 1.9 percent of assets annually but average about 1.3 percent for plans with fewer than 100 members, which account for 88 percent of plans.

The fees can be complex because several different companies may play roles in administering plans, leading to layers of fees shared among the primary plan provider, the plan sponsor and participants.

"When you're looking at some of your selections, look for some of the lower cost index funds that may not have what's called as much 'revenue sharing' in them," Exencial Wealth Advisors CFO John Burns said. "By default you're reducing your personal costs and the other participants are picking them up on your behalf."

Burns said larger companies with lots of plan participants will have the lowest administrative costs.

While you are researching your 401K plan, experts said now is a good time to evaluate your choices.

Make sure you are investing for the long-term

Diversify

Do not shy away from investing around the world

"If you have a 401k plan, you want to use it to your best ability," Burns said. "So look at your choices. Ask for some index solutions and lower cost choices. Ask your employer to make those available within the plan so you have some choices to choose from."